The figure below represents the U.S. market for steel imports from Korea. The Korean government provides an export subsidy of $25 per ton, and Korean firms use the subsidy to reduce their export price to the United States to $375 per ton.
Suppose the United States now imposes a countervailing duty on its steel imports from Korea to offset the impact of the subsidy provided by the Korean government on its steel exports. The change in U.S. national well-being due to the imposition of this duty is
A. +$3.75 billion.
B. -$4.125 billion.
C. +$3.375 billion.
D. -$375 million.
Answer: D
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